H&M Settles Wage and Hour Class Action for $3.8M

To dodge claims that the retail giant does not pay for off-the-clock work, H&M will pay a settlement of $3.8 million. The settlement amount will go to workers allegedly affected by H&M’s conduct and to California’s Labor and Workforce Development Agency.

The approval now awaits preliminary approval from U.S. District Judge Edward J. Davila. The workers and H&M agreed to settle the wage and hour class action lawsuit in order to avoid the costs and risks of continuing to litigate the issue. Class Members said that the compensation available to the class through the settlement was fair.

Why Are Workers Interested in Settling vs. Litigating?

In the motion requesting approval of the H&M payment class action settlement, the workers expounded on some of the risks associated with continuing to litigate. The workers had taken issue with H&M’s policy of requiring workers to go through security checks once they finished their shifts, but in their request for settlement approval, noted that these claims could fail if the court found that they fell under the de minimis rule of the Fair Labor Standards Act. The de minimis rule prohibits workers from filing lawsuits over small amounts of unpaid time that are “so irregular or brief that it is unreasonable to require compensation.”

The move for settlement approval was made before the California Supreme Court set a promising precedent in another wage and hour class action lawsuit. In a wage and hour class action lawsuit filed against Apple by a worker, a court determined that workers could claim that they should be paid for the time they spent after their shifts, waiting for their personal belongings to be screened, in security checks similar to those in the H&M class action lawsuit.

How Will Settlement Funds Be Distributed?

Per the terms of the H&M wage settlement, $75,000 of the $3.8 million will go to pay the California Labor and Workforce Development Agency, for alleged violations of the Private Attorneys General Act. $41,750 will be used to cover administrative funds, $1.27 million will be used to pay attorney fees, $250,000 will go to legal costs, and class representatives will receive $15,000 for their role in the H&M security check class action lawsuit.

The wage and hour class action lawsuit survived H&M’s move to prevent workers from gaining class certification, and was indeed granted class certification for some claims. In the motion for preliminary approval of the settlement, workers asked Judge Davila to certify a class consisting of all California H&M employees who are nonexempt from overtime and have worked for the retailer since October 2019.

Workers who perform shift work may encounter work that they are required to do outside of shift work. Some employers may try to get out of paying for duties like those listed in the H&M class action lawsuit, or others, like the donning of a uniform. If wearing a uniform is essential to the “principal activities” of a role, the time it takes to put on or take off a uniform must be paid says the Society for Human Resource Management (SHRM).

Not all industries have duties before and after shifts, but federal law makes requirements for many duties that are mandatory, but outside of typical work. In some industries, employees may be required to participate in training or meetings. 

The Fair Labor Standards Act requires employers to pay workers for trainings and lectures, among other activities, if they are mandatory and job-related.

The H&M Unpaid Work Class Action Lawsuit is Case No. 5:16-cv-00333, in the U.S. District Court for the Northern District of California.

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